Friday, 14 of December of 2018

Economics. Explained.  

Consumer Confidence

November 27, 2018

The Conference Board reported that consumer confidence fell 2.2 points in November to 135.7 after having gained 2.6 points in October.  The levels in recent months are the highest levels of confidence since September 2000 when it came in at 142.5.  The stock market decline in recent months has been shrugged off by consumers.

Lynn Franco, Director of Economic Indicators at the Conference Board said,  “Despite a small decline in November, Consumer Confidence remains at historically strong levels.  Consumers’ assessment of current conditions increased slightly, with job growth the main driver of improvement. Expectations, on the other hand, weakened somewhat in November, primarily due to a less optimistic view of future business conditions and personal income prospects. Overall, consumers are still quite confident that economic growth will continue at a solid pace into early 2019.

Confidence data reported by the Conference Board are roughly matched by the University of Michigan’s series on consumer sentiment.   As shown in the chart below, trends in the two series are identical but there can be month-to-month deviations.

The consumer should continue to provide support for overall GDP growth in 2018.  The stock market has been struggling for a month but should resume its upswing after the election.  Home prices continue to climb.   Jobs are rising by about 190 thousand per month.  The unemployment rate is falling slowly. The consumer has little debt.  Interest rates remain low.  In addition, consumers received a cut in income tax rates in 2018.  Clearly, the consumer’s optimism is valid.

We anticipate GDP growth of 3.1% in 2018 and 2.8% in 2019.

Stephen Slifer


Charleston, SC

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